In the mid-1990s, the first online monetary-game providers were established. These game providers gained popularity throughout the decade. Internet gaming websites increased from just 15 in 1996, to 200 in 1997. Online gaming revenues exceeded $830 million in 1998 alone. That same year, the first online poker rooms were introduced. And in 1999, multiplayer online gaming was also introduced.
By 2001, the estimated number of people who had participated in online gaming was 8 million. In 2006 the number of people who gamed online was estimated to be between 14 million and 23 million. And in 2008, worldwide online gaming revenue were estimated at $21 billion.
The Internet has allowed wider access to traditional games, has allowed for new types of gaming, and has changed betting habits. Internet gaming has become one of the most popular and lucrative business present on the Internet. This is partly due to the wide range of gaming options that are available. This wide range of gaming options includes those listed below.
Poker—Online poker includes Texas hold 'em, Omaha, Seven-card stud, razz, HORSE and other game types in both tournament and ring game structures. Players play against each other rather than the “house” with the game provider making its money through “rake” and through tournament fees.
Casinos—There are a large number of online casinos in which people can play casino games such as roulette, blackjack, pachinko, baccarat and many others. These games are played against the “house” which makes money due to the fact that the odds are in its favor.
Sports betting—Sports betting is the activity of predicting sports results and placing a wager on the outcome.
Bingo—Online bingo is the game of bingo played on the Internet.
Lotteries—Most lotteries are run by governments and are heavily protected from competition due to their ability to generate large taxable cash flows. The first online lotteries were run by private individuals or companies and licensed to operate by small governments. Most private online lotteries have stopped trading as governments have passed new laws giving themselves and their own lotteries greater protection. Government controlled lotteries now offer their games online U.S. lotteries are generally heavily regulated by individual state laws.
Horse racing betting—Horse racing betting comprises a significant percentage of online gaming wagers and all major Internet bookmakers, betting exchanges, and sports books offer a wide variety of horse racing betting markets.
Mobile gaming—Mobile gaming refers to playing games of chance or skill for money by using a remote device such as a tablet computer, smartphone or a mobile phone with a wireless internet connection.
In-Play gaming—In-Play gaming is a feature on many online sports betting websites that allows the user to bet while the event is in progress. A benefit of live in-play gaming is that there are a wide variety of markets. For example, in soccer a user could bet on which player will receive the next yellow card, or which team will be awarded the next corner kick.
Online gaming is heavily regulated in the United States. In September 2006, Congress passed the Unlawful Internet Gaming Enforcement Act of 2006 (“UIGEA”) to make transactions from banks or similar institutions to online gaming sites illegal. The Act was signed into law on Oct. 13, 2006, by President George W. Bush. Subsequent bills have been introduced that would modify UIGEA by providing provisions for licensing Internet gaming facilities.
Other bills have been introduced that focus solely on online poker and would create uniform standards. Among other things, these bills would mandate steps that would limit underage access to online poker, protect consumers from fraud and preserve some state rights and revenues related to the activities. Many of these bills would prohibit the use of credit cards to fund the accounts of online poker players.
In 2010, the New Jersey expressly legalized certain forms of online gaming. New Jersey allows bets to be taken by in-State companies on poker games, casino games and slots. The law excludes sports betting but allows for sports betting to be potentially regulated separately. States including Delaware and Nevada have also taken steps to legalize forms of online gaming. All states that allow online gaming currently only allow people within their borders to use their computers to play online at state-sanctioned websites. The states that allow gaming are also exploring agreements with the other states that approve online gaming so that bettors can play the games across state lines. An important aspect of the negotiations between the states is how to track the location of the gamer and how to divide revenues between the states.
Funds for online gaming can come from credit cards, electronic checks, certified checks, money orders, or even wire transfers. Normally, gamers upload funds to an online gaming company, make bets or play the games that it offers, and then cash out any winnings. Gamers may be able to fund gaming accounts by credit card or debit card, and cash out winnings directly back to the card. Most U.S. banks, however, prohibit the use of their credit cards for Internet gaming, and attempts by Americans to use credit cards at Internet gaming sites are usually rejected. Moreover, current laws prohibit the use of credit cards to purchase state lottery tickets, and many retailers prohibit the use of debit cards to buy lottery tickets or strictly limit their use. Some electronic money services offer accounts with which online gaming can be funded; however, many such fund-transfer sites such have discontinued service for U.S. residents.